• The US government has concluded that China employs unfair practices in the shipbuilding sector.
• An investigation initiated by USTR reveals a significant increase in China's market share from 5% to over 50% since 2000.
• The findings may lead to tariffs or port fees on Chinese vessels.
• Experts warn that revitalizing the US shipbuilding industry will require significant time and investment.
• Both major political parties in the US agree on the need to combat China's growing dominance.

In a significant development, the Biden administration has substantiated findings that indicate China utilizes unfair trade policies and practices to dominate global maritime, logistics, and shipbuilding sectors. This conclusion stems from a comprehensive trade investigation spearheaded by U.S. Trade Representative (USTR) Katherine Tai, which was launched in April 2024 at the urging of the United Steelworkers union and several other labor organizations under Section 301 of the Trade Act of 1974. This statute allows the U.S. to penalize countries for engaging in practices that are deemed "unjustifiable," which can burden American commerce (reported by Reuters).

Sources familiar with the investigation disclosed that China has made unprecedented advancements in the shipbuilding and maritime sectors by employing tactics such as financial backing, imposing barriers on foreign competitors, forced technology transfers, and intellectual property theft. Notably, these practices have allowed China's share of the global shipbuilding market to balloon to over 50% in 2023—a sharp increase from a mere 5% in 2000—while the share of U.S. shipbuilders has plummeted to below 1% (as highlighted by SCMP).

The impending USTR report is anticipated to pave the way for new tariffs or potential port fees on vessels produced in China, echoing past trade measures implemented during Trump’s presidency. These recent findings present a new opportunity for lawmakers to address what many perceive as aggressive industrial policies from Beijing, reflecting a rare moment of bipartisan acknowledgment regarding the need to fortify the U.S. shipbuilding sector.

In response to the growing concerns, anti-China sentiment has been echoed by both sides of the aisle in U.S. politics, emphasizing the need for immediate action to rectify the challenges faced by domestic shipbuilders. Scott Paul, President of the Alliance for American Manufacturing, remarked, "This is not going to be a quick fix," indicating that comprehensive measures and a long-term strategy will be essential to restore the once-thriving U.S. maritime industry.

Experts suggest that revitalizing U.S. shipbuilding may ultimately require investments in the tens of billions and will not be remedied by tariffs alone. Current statistics indicate that the U.S. is left with only 20 public and private shipyards, a drastic reduction from over 300 in the early 1980s. There is broad consensus among experts that demand for both military and civilian vessels continues to grow, yet has not been matched by production capacity in the U.S.

As these developments unfold, stakeholders and industry analysts await the formal findings of the USTR, which are expected to be published shortly before President Biden’s departure from office on January 20.

For further details, please reference the full articles via Reuters and SCMP.